Salaried class wants base IT exemption limit raised to 3 lakh: Survey

A majority of the salaried class wants the finance minister to raise the income tax exemption limit to Rs3 lakh and increase eligible deductions like medical and educational allowances in the Budget, an Assocham survey has found.

The survey, `Budget 2013: Common man's expectations from the FM', has found that over 89 per cent of the respondent wanted the slab of tax-free income to move up in line with real inflation. The current basic exemption limit of Rs2,00,000 should be increased to at least Rs3,00,000 with the limit for women going up to Rs3,50,000. This will increase the purchasing power of individuals and stimulate demand, according to the survey.

''Pushing the basic exemption limit will help the tax payers in saving taxes and will also align it with the proposals made by the Parliamentary standing committee on the direct taxes code (DTC)'', the survey noted.

With increasing healthcare costs, the existing tax-free limit of Rs15,000 should be increased to Rs50,000, the same also needs to be considered in the budget, according to 89 per cent of the respondents.

The transportation allowance granted by the employer to his employee for commuting between the place of work and residence is tax-free to the extent of Rs800 per month at present. This limit was fixed more than a decade ago, and definitely needs to be revised upwards to at least Rs3,000 per month, given the rising commuting costs across the country, adds the survey.

Benefits related to housing, ie, the deduction limit for payment of interest (on self occupied property), have remained constant at Rs1,50,000 since 2001 despite steep increases in property prices and accordingly the amount of loan. ''An increase in the exemption limit to Rs2,50,000 will be a welcome change'', the Assocham survey said.